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Eric D. Werker

Eric Werker is Associate Professor in the Business, Government, and the International Economy Unit at Harvard Business School. His research explores the political economy, macroeconomics, and business environments of emerging and frontier economies, particularly in Africa.

Professor Werker has written on fragile states, foreign aid, foreign investment, non-governmental organizations, conflict, and governance. His work has been featured in the Financial Times, Washington Post, BBC, NPR, and publications across the developing world.

Outside of academia, Werker is the Country Director for the International Growth Centre's program in Liberia. He has worked with the US Government’s Millennium Challenge Corporation on foreign aid projects and with the NGO Conservation International on low-carbon development. He serves on the Advisory Group of the Center for Global Development, is a Fellow at Harvard Kennedy School's Center for International Development, and has worked with corporations and nonprofits on their decisions and activities in emerging markets.

Werker earned his Ph.D. and AB in economics from Harvard University. In his spare time, he enjoys family, skiing, climbing, and mountain biking. He lives in Somerville with his wife and two children.

Using rainfall, public relief, and election data from India, we examine how governments respond to adverse shocks and how voters react to these responses. The data show that voters punish the incumbent party for weather events beyond its control. However, fewer voters punish the ruling party when its government responds vigorously to the crisis, indicating that voters reward the government for responding to disasters. We also find evidence suggesting that voters only respond to rainfall and government relief efforts during the year immediately preceding the election. In accordance with these electoral incentives, governments appear to be more generous with disaster relief in election years. These results describe how failures in electoral accountability can lead to suboptimal policy outcomes.

Ten of the fifteen seats on the U.N. Security Council are held by rotating members serving two-year terms. We find that a country's U.S. aid increases by 59 percent and its U.N. aid by 8 percent when it rotates onto the council. This effect increases during years in which key diplomatic events take place (when members' votes should be especially valuable) and the timing of the effect closely tracks a country's election to, and exit from, the council. Finally, the U.N. results appear to be driven by UNICEF, an organization over which the United States has historically exerted great control.

We use oil price fluctuations to test the impact of transfers from wealthy OPEC nations to their poorer Muslim allies. The instrument identifies plausibly exogenous variation in foreign aid. We investigate how aid is spent by tracking its short-run effect on aggregate demand, national accounts, and balance of payments. Aid affects most components of GDP though it has no statistically identifiable impact on prices or economic growth. Much aid is consumed, primarily in the form of imported noncapital goods. Aid substitutes for domestic savings, has no effect on the financial account, and leads to unaccounted capital flight.

In this paper we explore the innovations in governance that have promoted investment and growth. Some policymakers have tinkered with their country's institutions, some have undertaken wholesale changes, while others have attempted to influence the rules in other countries. We survey past attempts at governance innovation, from private governance in India's industrial cities to cross-border government efforts, like Singapore's Suzhou Park, outside of Shanghai, from norm-changing mimes in Bogota to rule-of-law enforcing anti-corruption authorities in Hong Kong. From these recent experiences, we try to extract a few key principles that characterize governance innovations that encourage investment and growth. These include competition, which puts pressure on policymakers to improve institutions; information, which provides necessary knowledge to citizens that can help them push for improved governance; trade in institutions, which allows effective institutions to move across borders; and shifting culture, that is, the jolting of norms to be rule compliant. Finally, we use these principles combined with historical precedent to describe the potential consequences of some recent proposals for governance innovation.